Golden Mile Enterprise uses the weighted-average method in its process costing s

Question

Golden Mile Enterprise uses the weighted-average method in its process costing system. The following information was available for one of its processing departments: The beginning work in process inventory consisted of 16,000 units, which were 75% complete with respect to conversion costs. The department converted the equivalent of 59,000 units of production during the current month. A total of 50,000 units were completed and transferred out of that department during the current month. The ending work in process inventory consisted of 12,000 units, which were 50% complete with respect to conversion costs. The number of units started during the month in that department was: 42,000 units. 29,000 units. 54,000 units. 46,000 units.

Explanation / Answer

Total units = Units completed and transferred + units in ending work in process

                   = 50,000 units + 12,000 units = 62,000 units

Again,

Total units = Units in beginning work in process + units started this period

62,000 units = 16,000 units + units started this period

Units started in this period = 62,000 units - 16,000 units = 46,000 units.

The number of units started during the month in that department was 46,000 units.

Hence option 1st “42,000” is correct answer.

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